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tv   Bloomberg West  Bloomberg  March 7, 2014 1:00pm-2:01pm EST

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>> live from pier three in san francisco, welcome to "bloomberg west." coming up today, a key ruling that could open the skies to drones. and howry ceo john chan he is working with the white house to keep a blackberry and the president's hands. i want to get you caught up on her top tech headlines grid bees and mastercard are joining with merchants to form a new group to improve credit debt credit card
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security and speed up the chip technology in the united states after recent security breaches at target and other retailers. the sigma mastercard, and american express have given most merchants until october, 2015 two top of that technology. groupon is the latest technology company to have an insane ipo. brought thats not post-up robinson 2009 but the site makes money on users downloads of coupons. we are learning that twitter page $36 million for 900 ibm patents purchased back in december. this was done after ibm wrote to twitter after possible infringement or it the twitter had only nine patents before this.
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the hunt for the original creator of that coin. he is living in southern dorian says youi never heard of it until a few weeks ago. >> the main reason i am here is to clear my name and i had nothing to do with bitcoin. i had nothing to do with developing. i was just an engineer doing something else. >> so? is he or isn't he the inventor of bitcoin? jon erlichman is outsideyucca moto's house -- down here ando there are reporters back here today. we have been here for several hours. mr. nakamoto has not been seen yet. reporters have just been leaving business cards at the front door. he did take time yesterday in an
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extensive interview with the associated press to say he is not the guy and did not create bitcoin. " newsweek" is standing by its story and here we are where the world is forming its own opinion. we have been asking the neighbors if they know him. across the street is well aware that this story is out there. she says she has no clue if he is the creator and has not seen him too much walking around the property over the last few years and said it was more common for him -- for her to see his mother. >> you will not see bitcoins laying around the yard? is there any clues? no, there is a certain fascination with this story. as the story came set that came out, there has been secrecy surrounding who actually created bitcoin. there is the possibility it was a group of programmers and then
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all of a sudden, they said this one individual living in this would-be community did and there thebeen suggestion that person would have an enormous amount of wealth at their fingertips. you heard what he told the ap and will likely to continue to say that the we will stick around to see if he has anything more to say. >> thank you. a judge has overturned the first ever attempt of the faa to find a drone operator. who has the right to regulate drones? megan hughes has more. tell me about this ruling. >> the case we are talking about who faces ailot $10,000 fine from the faa which is now null and void. he was charged with reckless
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piloting of this drone. this is the university of virginia emotional video he was shooting back in 2011. you can see in the video he is going under bridges and near statues and over pedestrians and over cars. case out ofthis thentsb in denver said there are no enforceable rules. this was shot with a drone that was less than five pounds. and thereneoam wing is no precedent for any kind of rule to enforce here. the faa is contending that commercial drug use was and while they are working on the rules. now this just lows that up. hamiash,nteresting, are we looking at a situation where all systems are go? >> absolutely, this will be a
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gold rush like it was back in the days with gold. last year, a lot of people got in early. i was one of them with a company called sky catch and we were excited. i had a big vision for early entrepreneurs and what they would do an amazon did of pr stunt and made a big noise. this is one of the right steps in the right direction, to get to where we need to for the commercial drone market. >> is there a reasonable case to say the faa does not have a right to legislate this? >> the perspective from the drone industry groups is they say this underscores the need for rules. they say the reason this judge made this decision is that there are no rules on the books and they want to see these rules that were supposed to come out in 2011 and now they are supposed to come out in november for commercial drone use and they keep getting pushed back. they want the rules on the books so some of the bigger
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players can feel comfortable and know what they are investing in is legal. they say they are seeing a lot of big business moving overseas because there is still some uncertainty here. they are interpreting this decision as a push for rules. video of showing some delivering beer to ice fishermen. i can say that's a necessity. what is the big business you think will open up immediately if the rules are dropped? >> this is already going on. all over the world. the faa is a little late to the party so we are waiting. it will open up a whole bunch of markets. this has to do with data. sky catch has a lot of contracts that deal with commercial agriculture. construction, mining, and energy are others.
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this will open up a lot of markets. >> let me back up -- when you talk about agriculture, specifically what? >> think about your farmer and you are looking at your crops. many times they don't know what is happening and they can survey it on a huge property and could have drones going into check to see if they are getting infested by insects. side,n the every culture you can also look at the entire landscape. there is thousands and thousands of acres that these big agriculture farms have. they are replacing men and women out in the fields. they are getting the drones to really take the data. at sky catch, we call them aerial robots, not drones. it is watching what is happening. >> you called the amazon thing a pr stunt? >> we were showing video of a
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flower delivery and you mentioned the beer delivery. all of these companies have been receiving letters from the faa. this case was the first find that they have been receiving cease and desist letters, more than a dozen companies. the faa is having trouble keeping track of these. they got these letters but today's case kind of makes those letters worthless. >> it does, how they are talking about these drones are like model aircraft. anything under 400 feet, literally the faa does not care about. this is one step in the right direction for the battle. delivery will be one of the markets that will take off for sure. not what amazon did. you are not going to see what you saw on "60 minutes." is maybe all see
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pizza truck or a fedex truck will be on your block and you'll see a whole bunch of drones pop-out and they will go and deliver just like your mailman does. pryou think that was a stunt? >> it was. it was great for them. yearn spent $6 billion per just in shipping. for amazon, if they can cut into that with the drones, even 10% or 50%, look at the money they will be saving. why the faa has anothers legislation, reason is jobs. it will open up a huge economy and all these jobs, maybe 100,000 jobs in the next two years, after 2015 and all the regulations are approved, that will open up even more jobs. the market is huge, we are
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talking about billions of dollars in there has been close to $100 million invested in drone startups as well. >> i don't know if we will start laying off all the ups drivers just yet. thank you both. a quick programming note -- later today, i will speak with salesforce ceo marc bening on the 15th anniversary and get his indistinct inequality struggle in the technology community so tune in at 6:00 eastern right here on bloomberg tv. still ahead, is this man really the inventor of bitcoin? we will go back live to southern california to talk about the secret behind the bitcoin after this break.
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>> welcome back to "bloomberg west." nakamoto the bitcoin
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creator? wild has been a relatively 24 hours for what is a pretty sleepy community in temple city. it is in the pasadena area, about 20 minute drive from beverly hills. if you think about how all of this and folded, this explosive newsweek story which reveals where mr. nakamoto is, the reporters made their way here and he eventually addressed the reporters. in some situations, when you have a situation like this, the person the story is about will make some comment. his comment was more about the idea of who's interested in giving me a free lunch. as a result, he ended up going with the associated press reporter and they drove away and all the reporters follow. this is getting tracked on social media and people got interested in the story because of that part of it.
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it has gotten that much more interesting now that we have him saying he is not the creator of bitcoin. >> the bitcoin users seem particularly fanatical like any early adopter might the. have they shown up as well? these people have staked so much of their lives on that coin so have they shown up to see the man himself? >> i would say no. these are mainly reporters here now. maybe we are just trying to get more details. you are right, there were people who were immediately, based on the newsweek story, who were very angry at the fact that there were these revelations of who he was. the other reason why you seen so many people discussing this online and through social media is that this is a somewhat comparable figuring out what is fact and what is fiction. facebook have become platforms we now use in big ways
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when stories are developing. this might be different because you have one story from a very organizationedia and you match that with commentary coming from the person the story is about and then people continue to weigh the back-and-forth of it online. you have some very strong commentary online from those who are backers of this crypto currency. but they have not been showing up here. thet's also interesting fanatical nature of this thing. it's amazing that people with such a great interest in this are actually upset about the fact that that interest led to people finding out who invented this and track this guy down. they have their reasons for it. there has been a lot of discussion around that online. public, there's always going to be a fascination in creators whether they are
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creating something perceived as being good or bad. many would argue that we are talking about something that has been transformational. for years, people talked about the idea of a digital current to becoming reality but all the while cards that got in the way about happening -- you have seen those who were early members of the club that have become these incredibly wealthy people because of the success of bitcoin and they made the story more interesting when it was initially thought that here is somebody who was the creator who maybe is worth a lot of money but we don't really know. he was living modestly in temple city. there is a fascination tied to bitcoin and the secrecy surrounding its creation. you expect though some might be frustrated at this revelation true or false, there are so many more people who are curious about the story overall. >> jon erlichman, thank you very much and the author of that smart"ill be on "street
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later today. we will hear about the terrific job she did reporting this thing and i'm covering this great mystery. we've got the insiders guide to austin, texas next. ♪
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welcome back to "bloomberg conferencetesxsw opens up today in austin, texas. if you're curious, a attention. we break down what everyone will talk about this weekend. >> going down to austin for sxsw interactive festival? pr three things everyone will be talking about --
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there is a paradox, everybody loves coming down to austin for its laid-back vibe but if every corporate marketing company blows their money on public relations, it ruins that vibe. the police shut down the pandora party last year and lady gaga was denied a permit to do a concert in a giant doritos vending machine. we are getting into close yogi berra territory for it no will will go there because it is too crowded. this year, there are more sessions discussing the role of women in technology than ever before, 17 of them. --er leaning in and out analyzing every move of marissa mayer's, it would be natural this would be a huge topic. we are now in the second phase of the women in tech issue. we are recognizing there are not enough women in tech and the second thing is to talk about and the third will be when women in tech is not an issue, just a
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reality. it's almost too obvious to bring this up but facebook's 19 oh yuan dollar hurt just ofw hatsapp will have everyone wondering who will hit the powerball this year and some i think it could be another messaging app but they would be wrong. they have been a big deal going back to 2011 when the conference darlings were companies that did this and popularity at sxsw is no indication of future earnings. otherwise, we would be talking about groupme and beluga. >> that's old school. later today, i will speak with the salesforce ceo marc benioff. the company celebrates its 50th anniversary with a huge party taking place across the street from our office.
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be sure to tune in for that at 6:00 eastern right here on bloomberg tv. ♪ >> it is 26 minutes past the hour "on the markets which means we are "on the markets. " let's get you caught up on where stocks stand. we had the jobs report coming out earlier with more jobs added to the economy last month and have been estimated. 0 ofemployment rate was 1/1 one percent higher. in reaction to that, we are seeing a little change picture in the market. some investors are saying there are still concerns about ukraine and the situation there spilling over into the broader local economy potentially. that the perspective is the s&p 500 closed at a record yesterday so we are slightly off of those levels today. let's talk individual stocks -- shares of big lots are asserting
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the most in six years after posting fourth-quarter profits that beat analyst estimates on the company explored a sale three years ago scaled-back estimates last year amid a revenue slump. we will have more "on the markets"in 30 minutes. ♪
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>> you are watching "bloomberg west." new information on how things are going for box. revenue projected this year will double from last year. filed for an ipo earlier this year and sources say it plans to make its prospectus public in the next few weeks. y is here now and these are the questions -- how big is this business that has their competitors so excited, $100 million last year? >> it looks like it will double this year. one of the businesses has been2x every year.
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all these companies that have had all their data and documents on premise in their local servers and data centers are all moving to the cloud. has positioned itself as an enterprise provider for companies ready to do that. they provide secure service for companies that want their employees to be able to collaborate on documents across the firewall. >> that is a big number. how do they compare to other companies? software service companies look at public markets, 100% growth is considered quite good. public markets tend to look for 50% and above. those would be high-growth companies. to bc received quite well because the companies before them have done quite well in the market. the public market investors are very primed for a business like this. comparisoning at its
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-- salesforce in 2005 was doing $176 billion -- $176 million and that was doubling back ends about a good-sized business. >> investors are really rewarding companies with this approach. you are seeing companies with 20 times price to sales ratio. than theh greater multiples. weeku wrote a story this that i think was one of my favorite stories about this current bubble. about the later stage that companies are doing going public right now. >> there is a long history but the idea was that during the financial crisis, no one could go public. you had these companies that were growing up during that time but there was no ipo window. the ipo window is now open and out you accompanies the may have started in 2003 and they would
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have gone public but there was no opportunity for them to do so. now, they are three or four years old or so companies are more mature so the numbers are bigger. the problem is for companies that are not mature and the ipo market is not that open to them because there is not the demand. that this timeht it's a different argument. we have had a couple of financial bubbles like real estate and dot com but the nature of these things are always different. remember covering finance during the real estate bubble. the number of analysts and investors i talked to that said this is not really a bubble because there is a hard asset underneath and even if the market collapses, everyone still has their homes and then it ended up in the biggest financial crisis since the great depression. all bubbles do not look alike. >> i thought your story was
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terrific. tech news editor. peopleen has surprised with blackberry. some say they still face a tough road ahead. we talked to him yesterday and he talked about the decision to change the company's name from research in motion to blackberry. >> i personally like research in motion that her because i grew up with a pager. soad a keyboard-based phone i don't know. the name is interesting. this is a joke -- if myys tell people that kid is not doing well in school, i am thinking of naming him somebody else. that's the trick and that will make him the number one student. i will rename him every day if that works.
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theave to compete and do right thing. naming his naming, whatever. we have a good brand. >> in all seriousness, are you sticking with the blackberry nine? >> yes, i never gave a one nanosecond thought about changing names. >> something that you have thought about is your future devices and you talk recently about the keyboard device for the keyboard enthusiast which will be launched later this year. in terms of time, is this something you want on the market by september or before? >> i would like it to be there yesterday. i could not get there yesterday because i have to make sure that the user interface is one that has more than just technology as bel as letting the user base very comfortable and familiar with it. i am bridging the two world so that takes a little while. it would probably be toward the
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end of the year like september or october. i am very much looking forward for that device. of your beste nonusers on the planet is president obama. not to say he would not use an iphone. he said for security reasons, he cannot use it. anything you would try to do to see if president obama has any input in what he would like to see in a q20? >> not in the q20. i have briefed the white house from an it perspective. we spoke to them about the plan going forward. it was customer outreach and they were nice enough to share some of their thoughts with me. >> what are they interested in? >> that would make national headlines. they give me some thoughts on some stuff they like and some stuff they would like us to work on. i take it all to heart. >> i want to talk about the t
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mobile story. they unveiled a trade-in program to trade in blackberries for iphones. they don't tell you guys they're doing this. you blasted them in a blog and they backed down a little bit and tweaked the trade-in program for it in recent days, reports come and that this trade in program was very successful for them. can you weigh in on that? >> yeah, it's a strange situation. first of all, i have not seen the data of what they claim to be successful. i have to be honest that i see all data. see lld be nice to whateaked memo t mobile has and what facts are behind the numbers. i don't know whether that is real or not. i don't see what the fanfare has really generated. that is me not seeing it it does not mean i am wrong.
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ecosystem together and to mobile has always complained and gone to congress and say we have the big to suffocating us and did not give us space to survive. i wish -- in my case i have a big two writing on my shoulder and i would have thought it would be a more natural partnership to help each other out and get a better penetration in the market and have more customers. intended toy have take some of my effort away, so to speak. i can only say that i would love to see the numbers. i don't see the numbers. t mobile is not focused on price. ,ortunately, my strategy although i don't like it, it will not hurt that much. >> you have brought in a lot of people for management from your past. are you going to make more management changes?
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also, what does sap think about this? sap is afirst of all, huge company and has a lot of talent. this is not what i intended to do but you will understand that it is important for me to help stabilize the ship. partner as well as a customer of sap. we just announced the joint application last week. i think there is a lot to be done between the two of us. they have a lot of talent, huge company. some of those people i worked well within the past and i needed that help. quite said that, i am comfortable and happy with my management team right now. that -- there might be one or two more augmentations. they may or may not be from sap. i don't target them.
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i think i'm good. >> that was the blackberry ceo with jon erlichman. interesting interview an interesting guy. >> he is, investors like him quite frankly. the stock has risen in the neighborhood of 55% city to death since he took over. he takes a different approach and is more forthcoming than the previous leaders of this company but there are massive questions. in many ways, this was the course they could take. this is the kind of guy who was in a position to take them down that course. they are just struggling terribly in the world of devices. they are saying let's try to secure what we've already got. there are business and government customers that respect us and like our security and we can help manage the network of different devices people are using in the enterprise but there are so many competitors in that area. you think about citrix and
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vmware so it will not be easy but he came out with some interesting points. >> thank you very much. we will be right back. ♪
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>> this is "bloomberg west." facebook has now said it will crack down on illegal gun sales through its site and will delete posts of users trying to sell guns without background checks and so on. that and arep all working with the u.s. attorney general's office to change the policy. initially, facebook did not want anything to do with this. the founder of a group called moms demand action joins us from indiana. tell the story of what you did and what has gone with this battle against facebook to change their policy. harvellight after the tragedy at sandy hook that you started your group on facebook. >> yes, it's pretty ironic.
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we started it on facebook and i wanted to do something in reaction to the heart of the massacre. when i started my facebook page, i had no idea i would turn into an accidental activist in our organization in 15 months would have over 150,000 members in a chapter in every state in the country. when we found out that facebook was allowing the sale and trade of illegal guns on their platform, we realized we needed to act. this is the same site where we share pictures of our families and use it as a community. we realized we needed to ask them to act and stop allowing this illegal sale and trade on their platform. what do juicyy, going on on facebook? >> there are many different kinds of ads you can find and promotions and group pages. there is a page called guns for sale that has over 200,000 members. people were offering guns for
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sale or trade and saying things like they are available without a background check. we knew this resulted in crime and illegal sales prince someone who was 15 years old was able to buy a gun off of facebook. and thankfully these people were caught by the police but we don't know how many people are not caught. we needed facebook and instagram to close this very important loophole on their platform. >> what was the facebook reaction when you started making this thing known? >> like in a negotiation, it has its ups and downs. i think they were not very interested in changing their policy at first, not unlike starbucks and we got them to change their policy six months ago. they did the right thing. moms and america, one out of five, have a facebook page and visit it more than five times per day so we are an important demographic for facebook and grateful they listened to us. -- when everyone
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was looking at our history on facebook videos, you used that for political action drawing attention to this issue. >> those were emotional videos and we like our own videos on facebook showing what it has been like since we joined in the different pictures we posted. is a morey is there serious story to tell them that was the story of illegal sales and trades on facebook of guns. we use the interest around this the rise against illegal guns and it was powerful and it has gone viral. it was a very important way to tell the story of why this is so dangerous to our children and to our families and to our communities. facebook that you used to fix facebook. it's a wonderful story and good on you for doing that. watts, thank you for joining us. michael bloomberg is cofounder
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of mayors against guns. is the internet dying as we know it? we will explain the detour is taking next on "bloomberg west haircut ♪ ." ♪
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>> is the very fabric of the internet dying? there are enormous changes quietly underway messing with the basic structure of the information superhighway and those changes could allow companies like comcast and verizon decide among the winners and losers. we have a harvard love visiting professor joining me. also dave schaeffer. when we talk about how the internet works, i feel like it is very different than it was even 10 years ago when there was lots of companies. there are fewer ways to get online now. >> that is absolutely right. for most americans, their only choice for high-capacity,
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high-speed internet access is their local cable anomaly. -- monopoly. there are fewer choices and gives those players enormous power. they can control access for users and the networks that want to connect to comcast and time warner cable in order to reach you. >> we put together some graphics to help explain this. i want to pull these together. internet has tended to work was that whenever you that whoever you wanted to go to as a user, you would go online and be able to see those things and they have equal access. as a consumer, you could use whatever you want. now, there was a dramatic element recently, it did not get a lot of attention where netflix truck to do with comcast to get their own fast lane ahead of their competitors and left everyone else in the dust. one of the companies that got axed was cogent. what happened there?
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>> the internet is a network of networks with over 44,000 networks interconnected. in the case of comcast and netflix, comcast has refused to upgrade connections not only to our network to every other major backbone provider for the past year and a half. with that refusal, those connections became clogged and netflix was forced to enter into a more expensive agreement with comcast in order to bypass that congestion. it's fairly interesting, i feel like the implications are massive, not just for companies like yours who try to accelerate use on the internet but what are the implications? >> this is a titanic development. it makes the internet much more like cable tv. isre is a gatekeeper, it comcast or time warner cable,
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and they pick winners or losers and who makes it through their gates. it's like the traffic cones on the fort lee entrance to the george washington bridge. they are in a position to shape traffic and pick who gets to go through at a reasonable price. it's a big deal. >> i like to think of it as if ford owned the freeway and they decided that fords can only use the express lane. real problem here is that there is no choice. you got ford and nobody else when you're sitting in your living room. there are very few providers in the last mile for consumers and they are all charging a lot and they don't compete with each other. they divide up the market and this is a major problem for the country. americans havest the fastest internet connections in the world, right? >> that's not true. otherparts of asia and areas are faster. today, the service providers
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charge their customers for connectivity to the internet and have intentionally decided to limit that conductivity in order to force large content companies to effectively pay a toll. that has dramatically reduced the functionality of the internet as well as the speeds that the customers receive. aboutuess i was wrong americans having fast internet. at least time warner and comcast are separate companies. >> and they are planning to merge and they are feeling really confident it will happen. this will put the entire eastern seaboard under comcast control. they will have dirty 3 million customers and they will be deciding who reaches those customers on what terms. it's a terrible deal for the country. we need to be on a completely different trajectory it comes to high-capacity, high-speed access. we are paying seven times as much as people in other countries for second class, non-fiber service.
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do you see any potential for competition? ,e might not have competition may be of google fiber will show up or a dish network would give you internet over the air. is there any chance of that from cable providers. ? >> there is a tremendous amount of competition. we are the second largest carrier of traffic and carry 20 -- 21% of world traffic. in the local access networks, they are typically monopolies and for that reason they need to be regulated. what has happened is the cable companies have been allowed to act in a nonregulated manner. they over charge their customers and more insidious, i theyncent their customers to buy an upgraded service knowing that service will not deliver higher quality. >> i will leave it there but thank you very much.
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thanks for watching "bloomberg west." ♪
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>> the intersection of business and economics with the main street perspective. in ukraine plus $2 billion just at. will meet a woman who is ringing sustainable investing to wall street. to our viewers in the ice and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making


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